What is the difference between positive and normative economics? How can knowledge of positive economics be useful in normative economics?
What will be an ideal response?
Positive economics deals with "what is" while normative economics deals with "what ought to be." Knowledge of positive economic theories (the causal relationship between economic variables) can guide us in finding workable policies designed to achieve a normative economic goal.
You might also like to view...
Use the aggregate expenditures model and the following values to answer the next question.AMPCIGT$3500.75$400$400$200Determine equilibrium real GDP for this economy.
A. $4,600 B. $5,400 C. $3,800 D. $4,000
If penalties are imposed only on buyers (but not on sellers) of marijuana, the equilibrium price of marijuana ________, and the equilibrium quantity of marijuana sold ________
A) rise; increase B) rise; decrease C) fall; increase D) fall; decrease
Expansionary fiscal policy should be used if:
A) aggregate demand-aggregate supply equilibrium is below potential output. B) aggregate demand-aggregate supply equilibrium is above potential output. C) aggregate demand-aggregate supply equilibrium is equal to potential output. D) none of the above.
The market process ensures that, when all transactions are voluntary, resources get allocated to the use where they are valued the most
a. True b. False Indicate whether the statement is true or false